Paul Davidson has written a most interesting book entitled "The Keynes Solution".
Its purpose is to present a case for additional regulations to limit some of the excesses that free market capitalism and the failure to keep up with the latest financial instruments prior to this latest financial crisis.
Davidson re-presents the work of John Maynard Keynes not as a socialist, as some may believe, but as a problem solver of two difficulties contained within "Capitalism".
These two difficulties are one, that capitalism fails to produce and maintain full employment for everyone who wants to work and two, that it provides an arbitrary and inequitable distribution of income and wealth.
The author states that one of the roles of government is to "mitigate the excesses of an unstable system (capitalism) that lead to economic collapse".
I don't agree that it is capitalism's job to maintain full employment. The concept of "Creative destruction" requires that from time to time labor must be redeployed from one area of endeavor to the next and further doesn't have to fit within some predetermined time frame. Secondly I have found that your probability of being successful is directly related to one's willingness and level of hard work. The words arbitrary and inequitable seem way to definitive to be used .
I do agree that government (all of us in defining how we will live together) does have a role in mitigating the "Wild West" that capitalism can allow when we humans have no laws or standards to live by. Thus as Keynes would imply , there has to be some limitation of raw capitalism and this means we need applicable regulations and regulators as part of the solution.
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